How Trump came around to crypto – and what crypto wants in return

NASHVILLE –  With US President-elect Donald Trump’s inauguration less than two weeks away, cryptocurrency executives are jockeying for access to Trump himself and for a seat on the planned crypto advisory council, expected to be formed soon after he takes office on Jan 20.

Circle chief executive Jeremy Allaire said on Jan 9 on social media platform X that the stablecoin company contributed tokens worth US$1 million (S$1.37 million) to Trump’s inaugural committee, joining a parade of other CEOs vying for favour as the incoming administration works to form a key crypto industry group.

The planned crypto advisory council, which industry insiders intend to use to influence the incoming administration’s digital-asset policies, may comprise about two dozen CEOs and founders, according to people familiar with the matter who asked not to be named as they were not authorised to speak on the record.

Most of the likely appointees already have existing relationships with Trump, and have visited him in recent months, the people said. Trump and his inner circle, including incoming White House artificial intelligence (AI) and crypto czar David Sacks, are still weighing potential appointees.

Mar-a-Lago has hosted a steady stream of crypto hopefuls since Trump’s re-election in November. 

In December 2024, Crypto.com CEO Kris Marszalek met Trump at Mar-a-Lago to discuss crypto industry appointments and regulations. Earlier this week, Ripple chiefs Brad Garlinghouse and Stu Alderoty had dinner with Trump and discussed the industry at large, as well as the US Securities and Exchange Commission’s (SEC) lawsuit against the company, according to a person familiar with the meeting. 

Mr Brian Armstrong of Coinbase Global, the largest crypto exchange in the US, has also spoken with Trump in recent weeks. Coinbase, rival exchange Kraken and start-up Ondo have all pledged US$1 million to the President-elect’s inaugural committee. Ripple said in December that it planned to donate US$5 million worth of XRP tokens.

The industry is also hosting an event in Washington on Jan 17 in support of the incoming administration. Dubbed the “Inaugural Crypto Ball” and featuring a ticket price of US$2,500, the event is being put on as a collaboration among Mr David Bailey’s BTC and the Coinbase-supported advocacy organisation Stand With Crypto alongside Anchorage Digital, Bitcoin wallet developer Exodus and Kraken.

Other sponsors include Coinbase, Ondo, crypto wallet MetaMask and asset manager Galaxy. 

President-elect Trump was once sceptical of digital assets, saying Bitcoin “seems like a scam” and that crypto’s value was “based on thin air”. 

Times have changed. During his latest presidential campaign, Trump pivoted to crypto cheerleader: a July speech at the Bitcoin 2024 conference capped his complete about-face. Since his re-election, cryptocurrency prices have surged – especially Bitcoin’s, which hit a record high above US$108,000 in December – amid expectations that his incoming administration will pursue a pro-crypto agenda.

What has Trump said about crypto?

Trump has pledged to be a “pro-Bitcoin president”. He praised the original digital asset in his July speech in Nashville, saying “Bitcoin stands for freedom, sovereignty and independence from government, coercion and control”.

He has said he wants to make the US “the crypto capital of the planet and the Bitcoin superpower of the world”. He called crypto “critical to the future of American competitiveness” in a December post on Truth Social, the social media platform owned by Trump Media & Technology Group Corp. 

Trump’s embrace of the industry helped him land support from prominent crypto boosters such as venture capitalists Marc Andreessen and Ben Horowitz, and billionaire twins Tyler and Cameron Winklevoss. 

Billionaire Elon Musk, who riffed on crypto on Saturday Night Live and is often associated with memecoin speculation, donated US$238.5 million to America PAC, a super political action committee supporting Trump.

Mr Andreessen and Mr Horowitz each donated US$2.5 million to the pro-Trump Right for America super-PAC. The crypto industry also spent US$135 million, largely through the Fairshake PAC, backing candidates in the November elections – most of whom won their races.

What crypto projects is Trump personally involved with?

Trump and some of his family members are promoters – and beneficiaries – of World Liberty Financial, a crypto project that has its own token named WLFI. More than 16,000 people were holders of the World Liberty Financial token as at the end of October, just weeks after the project backed by Trump and his sons began selling the cryptocurrency to accredited investors on its platform. 

After crypto entrepreneur Justin Sun announced in November that he would invest US$30 million in WLFI tokens, the Trump family stood to collect at least US$15 million.

Trump has also ventured into other digital assets. He has released four collections of non-fungible tokens (NFTs) featuring heroic images of himself in different costumes and settings. The most recent collection of NFTs, which he dubbed digital trading cards, sold in August for US$99 each on the primary market.

Why have crypto prices surged?

Bitcoin, the largest token by market capitalisation, saw price gains of more than 50 per cent from the election through mid-December, and other cryptocurrencies have also surged. Prices have risen on the assumption that Trump and the incoming Republican administration will create a more friendly regulatory environment.

Investors in the crypto industry say this should lead to more people and institutions investing in the space, while also decreasing the risk of enforcement actions by the SEC. 

Trump has also enlisted crypto champions for important roles. Mr Musk and Mr Vivek Ramaswamy, for example, will lead an advisory group called the Department of Government Efficiency (Doge). It shares a name with a memecoin – Dogecoin – with which Mr Musk is popularly associated. 

Demand for Bitcoin exchange-traded funds (ETFs) has also helped to raise crypto prices, with US$110 billion invested in US Bitcoin ETFs as at Jan 8 – just a year after their debut. 

What has Trump endorsed on the crypto front?

Trump had pledged to fire SEC chair Gary Gensler on day one of his presidency; Mr Gensler pre-empted any such attempt when he announced his intention to resign before Trump was inaugurated. 

Under Mr Gensler’s tenure, the SEC filed legal complaints against cryptocurrency companies such as Coinbase Global and Binance Holdings for selling what the regulator alleged were unregistered securities. 

Trump nominated crypto supporter Paul Atkins to replace Mr Gensler, and that announcement helped Bitcoin climb above US$100,000 for the first time.

The President-elect nominated Mr Sacks to the newly created position of AI and crypto czar. Trump is also creating a crypto advisory group, made up of backers of the industry.

Trump said he plans to have the US government keep rather than sell Bitcoin holdings seized by law enforcement, making these assets the basis of a so-called strategic Bitcoin stockpile. He has also said he would like all Bitcoin to be mined in the US; this promise may prove difficult to fulfil due to the reality of decentralised networks and cheaper costs of energy in other parts of the world.

What has the regulatory environment been like?

The SEC under Mr Gensler had made clear that it considers most digital assets to be securities, a designation that brings with it an extensive set of requirements. The top US banking regulators separately issued a sweeping statement in early 2023 on the dangers of crypto. The collapse in November 2022 of the FTX crypto exchange left customers around the world facing the potential for billions of dollars in losses. 

Legislation proposed in 2022 to tighten US oversight of crypto has stalled in the Senate’s banking committee and faces an uncertain future. The Bill would give the Commodity Futures Trading Commission (CFTC) additional authority to oversee digital coins that are deemed to be commodities – likely providing the regulator with direct oversight of Bitcoin and Ether, the second-largest token by market capitalisation.

Currently, the agency’s remit is mostly limited to crypto derivatives. Under the Bill, the SEC would police digital coins that are used to raise money from the public, providing supervision similar to its oversight of a stock offering.

What does the crypto industry want from Trump?

Many in the industry want a more hands-off regulatory approach and approval of additional crypto ETFs. The crypto industry is also looking for specific legal language on what exactly crypto is and how the industry should operate legally, which could reduce worries of lawsuits from government agencies. 

Advocates would also welcome having crypto assets classified as commodities rather than securities, which would then make them fall under the remit of the CFTC. Many in the crypto industry believe the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency have forced banks to limit the industry’s access to their services, a posture they would like to see Trump end. 

Some in the crypto industry would also like to see Trump not only follow through on his plan to introduce a strategic US Bitcoin stockpile, but also have the government buy more of the token for the reserve. 

US Senator Cynthia Lummis has written a Bill that would order the Federal Reserve to sell some of its gold certificates to fund those purchases. Bets on Polymarket, a predictions platform popular with the crypto crowd, currently imply only about a 30 per cent probability that a reserve will be created during Trump’s first 100 days in office. BLOOMBERG

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